Answer the following statement(s) true (T) or false (F)
1. Depreciation payments are annual allowances set aside to replace worn-out capital
2. The indirect business tax is a tax on the sale of a stock or bond.
3. The main problem in calculating accurate GDP statistics happens when comparing
the GDP over time.
4. The price index is most often used to inflate the current GDP dollar.
5. The real output of goods and services per 100 people is called real gross domestic
product per capita.
1. TRUE
2. FALSE
3. TRUE
4. FALSE
5. FALSE
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In a market economy, the decision regarding allocation of resources is made by
A. the operation of the forces of supply and demand. B. policy authorities in Washington, D.C. C. budget planners in state capitals. D. committees from a variety of economic interest groups. E. All of the responses are correct.
If the marginal utility of apples exceeds the marginal cost of producing apples, then in a free market production of apples will ____, with the likely result that marginal utility will ____
a. rise; fall b. fall; rise c. rise; rise d. fall; fall
High income countries with larger governments as a share of GDP have generally
a. grown less rapidly than their counterparts with smaller governments. b. experienced less deadweight losses resulting from taxes and/or government borrowing. c. seen the government decrease in size as real GDP rises. d. been able to be more economically efficient.
Which of the following statements about the Social Security, Medicare, and Medicaid programs is true?
A) Spending on these three programs will rise from 10.4% of GDP currently to 19.7% of GDP by 2040. B) Costs are being driven up by the fact that Americans are living longer and medical costs are rising substantially. C) Some economists have argued for decreasing taxes to help with these programs' funding problems. D) Some economists have argued for increasing benefits to help with these programs' funding problems.